Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Basic award definition

What does Basic award mean? The basic award is the fixed-sum element of compensation an employment tribunal orders when it upholds an unfair dismissal claim. Defined by statute (Employment Rights Act 1996 in England, Wales and Scotland; Employment Rights (Northern Ireland) Order 1996 in Northern Ireland), it is calculated using the statutory redundancy formula: a set number of weeks’ pay for each full year of service, with age-related multipliers, a cap on a week’s pay and a 20‑year service limit. It is distinct from the compensatory award, which addresses financial loss. The Tribunal may reduce the basic award for the employee’s contributory conduct, or...

Unfair Dismissal Basic Award (Great Britain): Calculation, Age Bands and Week's Pay Cap, Minimum Awards, Two-Week Redundancy Awards, and Reductions and Offsets

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Practice notes

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This Practice Note looks at the Basic award, a constituent part of compensation in an Unfair dismissal case. It explains how the figure is calculated, including:

a maximum of 20 years’ service counted up to the effective date of termination;
the number of weeks per year set by age bands;
a week’s pay figure subject to a statutory cap;
a minimum award in some circumstances (for example, trade union activities);
a fixed two-week award in certain redundancy scenarios.

It further covers deductions for contributory conduct (whether or not the employer knew), the consequences of refusing reinstatement, and set-off to the extent of any redundancy payment already made. For general guidance on unfair dismissal remedies, see Practice Note: Unfair dismissal remedies—general.

Preliminary considerations

As an initial position, section 112 of the Employment Rights Act 1996 (ERA 1996) sets out mandatory remedies for a successful unfair dismissal claim. Accordingly, in every instance where a Dismissal is found to be unfair, the employment tribunal must explain reinstatement and re-engagement and ask the employee whether they want such an order to be made...

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Web page updated on 22/05/2026

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